SENATE BILL NO. 23
"An Act relating to transferable film production tax
credits; and providing for an effective date by
amending the effective dates of secs. 3 and 4, ch. 63,
SLA 2008."
9:53:22 AM
Senator Ellis welcomed MATT MOSER, STAFF, SENATOR ELLIS.
9:53:49 AM
AT EASE
9:53:55 AM
RECONVENED
9:54:31 AM
Senator Ellis presented the PowerPoint Presentation,
"Senate Bill 23: Extending the Film and Television
Production Tax Incentives." He stated that welcoming the
multi-billion dollar film and television production
industry to Alaska was a rare opportunity to grow and
develop a new industry in the state. It would create jobs
for Alaskans and diversify the economy. He stated that the
legislation would continue the growth and success of
Alaska's developing film and television production. He
stressed that the private sector was needed to ensure the
incremental capital investments. He felt that this
legislation would offer the private sector the certainty
that Alaska is open for business.
9:55:11 AM
Senator Ellis stated, "The film tax credit passed by the
legislature in 2008 is largely responsible for the recent
growth in this industry. Since their inception in 2008, 15
productions have received tax credits. These 15
productions filmed in Alaska for a total of 910 days and
had a total Alaska spend of nearly $15 million dollars.
As of January, 2011 there are an additional 28 productions
that are pre-qualified for Alaska Film Incentives. If all
these productions are completed they will have an estimated
additional projected Alaska spend of nearly $85 million
dollars. This brings the total projected potential boost to
Alaska's economy since 2008 to nearly $100 million
dollars."
9:56:31 AM
Senator Ellis presented slide 4. He stated that the
projected boost to the economy since 2008 was nearly $100
million.
9:57:02 AM
Senator Ellis presented slide 5, and stated "This $100
million dollars translates in to thousands of jobs,
opportunities for businesses large and small. We have
already seen the benefits of recent multi-million dollar
productions. There were hundreds of Alaskans working as
cast and crew, in jobs as varied as electricians,
carpenters, truck drivers, caterers, security guards and
plumbers. Mr. Chairmen, filming and production has taken
place in 35 communities all over our state."
Senator Ellis presented slide 6, and stressed that many
small business were positively affected by the legislation,
including ocean cargo shipping, rental cars and RV's, to
property rental, construction work, hotels, restaurants and
engineering firms.
9:57:55 AM
Senator Ellis presented slide 7, and explained that there
were many exciting projects in progress. He also stressed
that there was potential for training and education in film
and television production. He pointed out the
infrastructure around the industry was so booked with
shoots, that they did not have crew enough to meet the
demands.
9:58:51 AM
Senator Ellis presented slide 8 and stated that the
legislation would extend the film and television production
tax for ten years, and offered and additional $100 million
dollars in tax incentives for each five-year period.
9:59:38 AM
Senator Ellis presented slide 9, and pointed out the
legislation would continue to bring new money to Alaska's
economy; keep our businesses busy and put Alaskans to work;
and diversify our economy and grow and develop this new and
multi-million dollar business in Alaska.
10:01:25 AM
Senator Ellis presented slide 10, and noted that the
legislation would create diversification of the economy;
new private sector jobs; new opportunities for large and
small businesses; infusion of construction dollars; public
relations; opportunities in rural Alaska; and tax credits
for Alaska corporations.
10:02:05 AM
Co-Chair Stedman referred to two fiscal notes from the
Department of Revenue and Department of Commerce,
Community, and Economic Development.
10:02:49 AM
MAYA SALGANEK, UNIVERSITY OF ALASKA, FAIRBANKS (via
teleconference), spoke in favor of SB 23. She felt that the
passing of the legislation would encourage further study
and training in film and television production.
10:07:23 AM
WANETTA AYERS, DEPARTMENT OF COMMERCE, COMMUNITY, AND
ECONOMIC DEVELOPMENT, presented PowerPoint Presentation:
"Alaska Film Office Program Overview" (copy on file). She
stated that there was a desire to develop Alaska as a
preferred film destination.
10:08:17 AM
Ms. Ayers discussed slide 2, and stated that the Alaska
Film Office had five mandates: 1. cooperate with
organizations in the private sector for the expansion and
development of the film production industries in the state;
2. promote Alaska as an appropriate location for film
production; 3. provide production assistance through
connecting film directors and makers, and producers with
Alaska location scouts and contractors, including
contractors providing assistance with permit applications;
4. certify Alaska film production internship training
programs and promote the employment of program interns by
eligible productions; and 5. in cooperation with Department
of Revenue, administer the Alaska Film Production Incentive
Program.
10:08:54 AM
Ms. Ayers discussed slide 3, and stated that the Alaska
Film Office approached private sector collaboration in a
variety of different ways. She explained that their website
was a portal for a variety of information about the program
and interacts with the Alaska Film Office. She stated that
the Alaska Film Office was engaged with industry
organizations, trade associations, and allied groups; and
engaged in outreach through speaking engagements, targeted
contacts, and fielding daily inquiries.
10:09:51 AM
Ms. Ayers discussed slide 4, and stated that there was a
variety of print advertising in magazines, directories,
brochures, and websites to promote Alaska.
Ms. Ayers displayed slide 7, and stated that it was an
example of a customized program brochure that outlined the
production incentive and the advantages of filming in
Alaska.
Co-Chair Stedman asked about Alaska Hire provision, and how
it was implemented. Ms. Ayers replied that there was an
additional 10 percent credit for the wages that were
expended in Alaska for Alaska residents.
10:11:21 AM
Ms. Ayers discussed slide 8, and stated that the Alaska
Film Office provided assistance by responding to daily
inquiries about filming in Alaska; conducting follow-up and
outreach with contacts developed through advertising, trade
show and other promotional activities; meeting with
producers and providing introductions to states and local
contacts; explaining the Incentive Program and assisting
producers with the application process; providing
alternatives and creative solutions to production
challenges; and working with Alaskan businesses, community
representative and other stakeholders regarding prospective
projects.
10:12:08 AM
Ms. Ayers looked at slide 9, and stated that the Alaska
Film Office wanted to increase hiring of Alaskans. She
stated that hundreds of Alaskans had been employed in
Alaska. She stated that they were working with the
Department of Labor with regard to some apprenticeship
programs that could lead to technical careers in the film
industry. She furthered that the University of Alaska would
provide the academic programs that lead to certificates and
degrees recognized by the film industry. She stated that
private sector efforts would provide on-the-job training.
10:14:02 AM
Ms. Ayers detailed Slide 10 and explained the process for
the review of the final applications. She stated that there
was a pre-qualification process, which required the Alaska
Film Office to work with producers. She stated that once
the pre-qualification was approved, the production process
ensued. Once the production expenses were incurred in
Alaska, there was an audit, and final application and
approval of the process. A review committee that looked at
the final application and advances a notification to the
Department of Revenue that the final application was
approved, and the Department of Revenue would take over for
issuing a tax credit certificate.
Co-Chair Stedman surmised that there was an audit before
approval. Ms. Ayers responded that there was a requirement
for the production company to hire and Alaskan Certified
Public Accountant to audit the Alaska production costs.
Co-Chair Stedman asked if the audits were current. Ms.
Ayers answered yes.
10:15:27 AM
Ms. Ayers discussed slide 11, and stated that the displayed
chart summarized experience-to-date with regard to pre-
qualifications that were approved by fiscal year since the
implementation of the film production incentive program.
She furthered that slide 12 displayed a summary based on
pre-qualification.
10:16:05 AM
Ms. Ayers looked at slide 13, and stated that there were
two staff positions in the Alaska Film Office with
additional support provided by the state.
Ms. Ayers displayed slide 14, and explained that at the
implementation of the program conceived $275,000 per fiscal
year. She stated that in the current year, there was
$283,000 added, but it did not include estimation of
additional support costs. She stated that there was an
unallocated overhead cost of $27,800 for a total of
$310,800.
10:16:49 AM
Ms. Ayers showed slide 15, and stated that the film
industry was rapidly evolving. She explained that there
were a number of productions that were ready to produce in
Alaska.
Co-Chair Stedman wondered if the Department of Commerce,
Community, and Economic Development supported SB 23. Ms.
Ayers replied yes.
10:18:54 AM
JOHN RENSE, SENIOR OPERATIONS MANAGER, NANA DEVELOPMENT
CORPORATION, spoke in support of SB 23. He stated that the
bill would encourage economic diversity.
10:23:23 AM
BRICE HABERGER, TRADESMAN, JUNEAU, spoke in favor in SB 23.
He stated that he provided scouting services for the film
industry.
10:25:31 AM
DAVID GREATHOUSE, PRODUCER, WARP FILMS (via
teleconference), spoke in favor of SB 23.
10:29:55 AM
CINDY DRAPER, ABC MOTORHOMES (via teleconference), spoke in
favor of SB 23. She stated that they provided business for
the film, "Everybody Loves Whales."
10:31:00 AM
Senator Ellis expressed excitement for the discussion
regarding SB 23. He looked forward to working towards a
committee substitute
10:31:19 AM
Senator Olson wondered if it was a surprise how successful
the original legislation had become. Senator Ellis remarked
that it was surprising. He pointed out that there were some
skeptics, but the legislation had been successful.
Co-Chair Stedman remarked that Alaska was in an economic
upturn, while other states were experiencing economic
trials.
SB 23 was HEARD and HELD in committee for further
consideration.